Post by hrmadmin on - Tags: , , , , ,

The online poker industry in the US has made waves across the nation ever since 2013 when Delaware, Nevada and New Jersey went live with real money iGaming markets, but they haven’t all been positive ones. So-called industry experts made lots of predictions, from the amount of money states would generate from online gambling to the rapidity of jurisdictions expected to follow suit. In reality, however, not a single aspect of the market has lived up to those expectations.

Delaware chose to go ahead with online gambling because it already has a competitive land-based gambling industry, and wanted to maintain that same competitive edge as online poker and casino gaming emerged. Nevada is a no-brainer. Being the gambling mecca of the US, they weren’t going to miss a chance to be the first US state to enter the market, although they did choose to regulate online poker only to curb potential player losses at their land-based facilities. New Jersey had the same idea, but with a much greater population – near 3x that of Delaware and Nevada combined – went ahead with a full scale online gambling market.

Unfortunately, all three states have failed to bring in the revenue they were hoping for. All previous estimations were calculated by figuring up the amount of revenue that was being syphoned out of the country, state by state, into offshore online poker websites. The one factor they failed to take into account was the massive player pools these international websites had access to.

PokerStars, for example, is drawing tens of thousands of players, near enough to the 6-figure mark, but they are derived from a multitude of international jurisdictions. New Jersey may have about 9 million residents, but without adding in players from other US or international regions, there is simply no realistic way to harvest a comparable player base.

The truth of the matter is that, without shared liquidity among US states where online poker is regulated, the industry will continue to plummet until it eventually hits rock bottom. Even, an internationally renowned online gambling operator which provides the software for New Jersey’s top poker network, Party Borgata, lost money due to its investments in the Garden State.

Back in February, Nevada and Delaware agreed to share liquidity among their online poker players, and is expected to finalize the move sometime this Fall. However, Nevada and Delaware still have relatively low player bases, thus combining the two may not make much of a difference at this point. New Jersey has not negotiated any player pooling compacts yet, but may choose to do so if the necessary software systems used in Delaware and Nevada turn out to be successful.

If all three states were to pool their online poker player bases, it just might be enough to convince other states that regulating online poker is a worthy endeavor. Otherwise, the iGaming market could slowly burn out. California is on the verge of legalizing online poker, but so far has no intention of sharing liquidity; something the Golden State can potentially afford with a population of approximately 39 million. Other states like Pennsylvania have maintained a watch and wait attitude that will only come to fruition if other states’ online markets succeed.